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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13658
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I currently sell a range of different products on Ebay

Customer Question

Hi, i currently sell a range of different products on Ebay but the suppliers where i buy my products from are NOT VAT registered, so i do not think i can claim back any (input) VAT for my stock purchases? If this is the case would i be better registering for the FLAT RATE VAT option as then i know exactly what i need to pay HMRC at a lower VAT rate? If i register on the normal rate VAT system i will have to charge my customers and pay HMRC 20% (output) VAT and although i can claim back my stock costs as mentioned above my suppliers are not VAT registered so would i be worse of this way? Also is VAT charged on every item transaction amount after you go over the 82K threshold or if you just go over by £1 then you are charged VAT on all the turnover under 82K threshold aswell? Thank you
Submitted: 10 months ago.
Category: Tax
Expert:  Sam replied 10 months ago.
Hi Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer (and I worked for HMRC for many years and now have my own accountancy business) If your suppliers are NOT VAT registered then they have not charged you VAT on the products so you cannot claim back what you have not suffered. And if you think you will exceed even £1 over the £82000 threshold, then you must register for VAT and charge VAT on your taxable sales. In this instance the flat rate scheme would be more beneficial - as you are then just paying over 14.5% to HMRC instead of 20% which recoups some of the VAT input not arising. But look at what you are charged VAT on and can reclaim - and compare both situations to see which one sees you better off. And of course your turnover must stay less than £150,000 to qualify for this scheme Let me know if I can assist further Thanks Sam
Customer: replied 10 months ago.
Hi Sam. Thank you very much for your advice. Just to clarify the goods i sell would be mainly household products which fall into the 7% ratio on the flat rate scheme what is the 14.5% you mentioned above or is that just an average payable for goods on the flat rate scheme? Thanks.
Expert:  Sam replied 10 months ago.
Hi
Thanks for your response
The 14.5% applies to the average charge of flat rate scheme but of course trhe rates vary as this table shows
VAT flat rates
The VAT flat rate you use depends on your business type. If the rate changes, you must apply the new rate from the date it changes.
If you’re in your first year as a VAT-registered business, reduce the VAT flat rate by 1%. The reduced rate lasts until the day before your registration anniversary.
Type of business Current VAT flat rate (%)
Accountancy or book-keeping 14.5
Advertising 11
Agricultural services 11
Any other activity not listed elsewhere 12
Architect, civil and structural engineer or surveyor 14.5
Boarding or care of animals 12
Business services not listed elsewhere 12
Catering services including restaurants and takeaways 12.5
Computer and IT consultancy or data processing 14.5
Computer repair services 10.5
Entertainment or journalism 12.5
Estate agency or property management services 12
Farming or agriculture not listed elsewhere 6.5
Film, radio, television or video production 13
Financial services 13.5
Forestry or fishing 10.5
General building or construction services* 9.5
Hairdressing or other beauty treatment services 13
Hiring or renting goods 9.5
Hotel or accommodation 10.5
Investigation or security 12
Labour-only building or construction services* 14.5
Laundry or dry-cleaning services 12
Lawyer or legal services 14.5
Library, archive, museum or other cultural activity 9.5
Management consultancy 14
Manufacturing fabricated metal products 10.5
Manufacturing food 9
Manufacturing not listed elsewhere 9.5
Manufacturing yarn, textiles or clothing 9
Membership organisation 8
Mining or quarrying 10
Packaging 9
Photography 11
Post offices 5
Printing 8.5
Publishing 11
Pubs 6.5
Real estate activity not listed elsewhere 14
Repairing personal or household goods 10
Repairing vehicles 8.5
Retailing food, confectionery, tobacco, newspapers or children’s clothing 4
Retailing pharmaceuticals, medical goods, cosmetics or toiletries 8
Retailing not listed elsewhere 7.5
Retailing vehicles or fuel 6.5
Secretarial services 13
Social work 11
Sport or recreation 8.5
Transport or storage, including couriers, freight, removals and taxis 10
Travel agency 10.5
Veterinary medicine 11
Wholesaling agricultural products 8
Wholesaling food 7.5
Wholesaling not listed elsewhere 8.5
I am sorry if I confused you with the higher average rate!
Thanks
Sam
Expert:  Sam replied 10 months ago.
Hi
As you do not appear to need any further assistance could you take the time out to rate me for the level of service I have provided (or click accept) as this ensures Just Answer credit for my time
Thanks
sam

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